Anglo Leads Mining Collapse as China Woes Driving Vicious Spiral – by Agnieszka De Sousa and Jesse Riseborough (Bloomberg News – January 7, 2016)

Anglo American Plc led a slump in mining stocks to the lowest in more than a decade as market turmoil in China, the biggest consumer of metals, ignites a vicious spiral of tumbling equities and collapsing commodity prices around the world.

The 80-member Bloomberg World Mining Index sank as much as 4.1 percent on Thursday, with Anglo sliding 12 percent at one point to a record low and Glencore Plc down as much as 7.9 percent in London trading.

The Bloomberg Commodity Index, a gauge of returns on raw materials, dropped to its lowest level since 1999 as industrial metals and oil declined.

“It’s been a brutal start again to 2016 and a continuation, it seems to me, of the fears that characterized the second half of 2015,” Paul Gait, a mining analyst at Sanford C. Bernstein Ltd., said by phone.

This is “fear around a much more profound and much more significant slowdown in the Chinese economy. Nothing is more levered to the Chinese economy than the commodities space and we’ve seen the consequence of that.”

Miners have been battered by slowing demand in China and gluts in commodities such as copper and iron ore. That forced most to scrap dividends and offload assets, with Glencore among those selling shares to strengthen its finances.

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